Market Research is the New Black
In fashion, success depends on correctly predicting what people will be buying two years from now. Trend forecasters rely heavily on observation and instinct, often traveling the globe snapping photos of what people are wearing and then combining that with other kinds of information—from pop culture and politics to economics and consumer behavior.
Now a couple of upstarts in Brooklyn, New York are aiming to make it easier for marketers, buyers, manufacturers and retailers to predict the next big thing—and today’s big thing—by providing real-time information about what people are wearing, as well as how, when and why they are wearing it.
The company, Stylitics, is the brainchild of Rohan Deuskar, 29, and Zach Davis, 30, who met in 2004 while working for the same mobile marketing company. Both had experience using new technology to help brands connect with consumers.
They decided to target the fashion industry after Deuskar looked into his closet and had an epiphany: he had only the vaguest idea of his own style. He didn’t know which items he wore the most, or when, or which ones gave him the best value for his money. It struck him then that brands and retailers probably didn’t know how and why people make their daily clothing choices either, and he and Davis saw an opportunity to provide it.
The pair created an algorithm that can analyze local clothing trends based on information from the sites users, who can maintain a virtual closet or simply log in what they are wearing on any given day. What people wear—to school, to the gym, to the movies, to work, on a rainy day—will give marketers day-to-day knowledge of buyers’ appetites.
Constance Dunn, a consumer analyst in Los Angeles and author of Practical Glamour: Presenting Your Most Beautiful & Polished Self to the World, says what Stylitics is doing is essentially "looking at desire—and it’s kind of brilliant. Their entire business is premised upon delivering two of the market’s needs. On the consumer side, a growing desire for individuals to parlay something unique about their identity to the outside world and on the business end, real-time market research data."
Even if users aren’t honest about what’s really in their closets, there’s a lot to be gleaned from what we want, she says. "The fashion and beauty industry creates desire and then satiates it. That’s why this site has potential —it works from the bottom up, starting with what the consumer buys or wants."
Consumers who log in what they wear will not only receive discounts and rewards, says Deuskar, but information that could help them make more informed purchasing decisions. "Over time, a user can see what kinds of clothing items they wear most," he says. If you are debating whether or not to splurge on a $300 dress by a particular designer, you can look back at your "personal style report" and see that you’ve worn a similar dress eight times since you bought it, which may make this new investment worth it.
One weakness however, may be finding enough fashion-conscious people willing to take the time to log in. Candice Sabatini, editorial director of BeautyNewsNYC.com, says it’s hard to imagine college students working for free "in the hopes of being thrown a bone like a free surprise or maybe winning a trip to New York." She also says Stylitics makes an assumption that people will buy things they’ve bought before, but "other than jeans and T-shirts, that’s not true," says Sabatini. "A fashionable girl might assemble an outfit and ask her friends to comment on it, but I don’t see how that would help a manufacturer decide what to create for two seasons ahead."
But Deuskar points out the importance of information not just for forecasting, but for real-time marketing. "Let’s say I’m a marketing manager for a brand and we’re deciding if today’s e-mail offer should be pencil skirts," he says. "Now I can see all instances of people who have worn pencil skirts to work in the last two weeks, what colors, what style of shirt or blouse they wore with it, the average price point and the demographic of those who wore them to help me make my decision."
Deuskar and Davis won the grand prize at the Wharton Business Plan Competition this past April (Deuskar is a Wharton alumni). Stylitics has nine employees now, a small board of advisors and several apparel industry partners who signed on during the beta phase, says Deuskar, like market research firm Gilt Groupe and Lucky Brand Jeans. So far the founders have raised about $750,000 from angel investors and early stage venture capitalists. Although revenue will ultimately be driven by the analytics offering, the site will also allow for targeted advertising and affiliate sales. Deuskar says Stylitics will be out of beta before year’s end; right now you have to be invited to join.
Tamara Gruzbarg, senior director of analytics and research at Gilt Groupe, says the company is "turning market research into an interactive platform." Users are essentially a large market research panel, providing information about their purchasing and fashion habits. "There’s definitely a need for this information. And it could be much more detailed and personal than what you get from spending two hours in a focus group," says Gruzbarg.
Gilt Groupe is watching to see how Stylitics will evolve. Will the necessary critical mass of consumers log in their fashion information to make the data valuable? And will market research firms and other companies sign up to get that information? If they do, Gruzbarg thinks it could raise market research to a whole new level.
"The idea that people will take the time to provide much more detailed and rich information than is possible in traditional market research is the reason why we are interested," she says. "That kind of information could be extremely valuable to us."